DGT: Impossibility of deducting passenger car expenses with private use
The Dirección General de Tributos (DGT) has issued a decisive ruling regarding the deductibility of expenses associated with passenger cars in Personal Income Tax (IRPF). The resolution addresses the possibility of including these costs when the vehicle is not used solely for professional purposes.
What the DGT has ruled
The tax authority has clarified that, for passenger car expenses to be deductible, the vehicle must constitute an asset allocated exclusively to the economic activity. According to the criteria provided, as this is not an activity exempted by the regulations, allocation requires that the vehicle be used solely for the exercise of the profession.
Consequently, if the vehicle has private or mixed use, it loses its status as an asset allocated to the activity. This implies that no expense related to said vehicle may be deducted in the income tax return, as it does not meet the exclusivity requirement necessary for its tax treatment.
What this means for you
This criterion has a direct impact on self-employed professionals. If you use a passenger car for travel both in the exercise of your activity and for your personal needs, the administration considers that the vehicle is not exclusively allocated to the economic activity.
This means that expenses such as fuel, maintenance, insurance, or depreciation cannot be included in your deductible IRPF expenses. The lack of a clear separation between professional and private use nullifies the possibility of applying the deduction to the total costs of the vehicle.
What you should do
Given this situation, it is necessary to evaluate the nature of the vehicle's use and the applicable regulations according to Law 35/2006 (LIRPF) and RD 439/2007 (RIRPF). It is fundamental to analyze the reality of the economic activity and how assets are managed to avoid contingencies with the Tax Administration. It is recommended to assess each particular situation to determine the correct allocation of assets.
Frequently asked questions
- Can I deduct expenses if I use the car slightly for personal matters?
- No, the DGT establishes that if the vehicle has private use, it is not considered allocated and does not allow for the deduction of expenses.
- Who does this resolution primarily affect?
- It directly affects self-employed professionals who use passenger cars.